House price figures 'bode well'

Further signs of growing housing market confidence have been reported as a property search website revealed the lowest level of asking price reductions in at least three years.

Three in 10 (30.7%) sellers who have their home on the market have dropped their original prices, marking the lowest proportion on zoopla.co.uk's records, which began in summer 2010. Of the sellers who have had to slash their prices, the typical reduction is 6.1% or £19,595, showing the lowest average discount recorded since autumn 2010.

London, where the market has been buoyed by strong demand from overseas buyers, was found to have the lowest proportion of price reductions, with 23.5% of homes on the market having been reduced. Edinburgh had the second lowest proportion of prices adjusted downwards, at around one quarter of homes for sale.

A further sign that seller confidence is relatively strong in Edinburgh was shown by the fact that sellers there were found to be offering the smallest discounts off the original asking price in the study, at 4.9%.
The areas where larger proportions of sellers were still offering price reductions were concentrated in Yorkshire. Rotherham topped the list, followed by Doncaster, Wakefield and Barnsley. Around two-fifths of properties on the market in these areas have had their asking price cut. Sellers in Barnsley were also offering the biggest average discounts at 8.6%.

Despite the regional differences, the study adds to evidence that sellers generally are feeling less under pressure to cut their prices in order to make a sale. It follows several surveys indicating that Government efforts to make borrowing easier are helping a recovery in the housing market.

The number of mortgages on the market has increased sharply and lenders have slashed their rates since a Government scheme called Funding for Lending was introduced last August. Other initiatives called NewBuy and Help to Buy are specifically aimed at giving people with smaller deposits a helping hand.

Lenders have reported that more would-be buyers are making the jump onto the property ladder, which is expected to free up some stuck housing chains in the coming months. Experts have also said that a shortage of homes coming onto the market amid the increased appetite from buyers is also helping to keep sellers' prices up.

This time a year ago, more than one third (34.3%) of homes on the market had seen their asking price dropped, according to Zoopla's records.

Lawrence Hall, spokesman for zoopla.co.uk, said: "There is a generally positive sentiment in the property market at the moment that reflects a genuine belief that the worst of the economic crisis is behind us and that the housing market is at the early stages of a recovery. These figures show that fewer and fewer sellers are feeling the same level of pressure to reduce prices as over the past couple of years, which bodes well for a recovery in house pricing."

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